Texas Payday Act
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by: Dominic Audino
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The Texas Supreme Court's decision in Igal v. Brightstar Information Technology Group, Inc. may decrease employees' ability to be paid under the Texas Payday Act. The Court's holding very much favors employers. The Igal case states that a final decision by the Texas Workforce Commission ("TWC") denying recovery of wages stops an employee from subsequently starting a civil lawsuit to recover the same damages.
Under Chapter 61 of the Texas Labor Code, also known as the "Payday Act," an employee can file claims for unpaid wages with either the Texas Workforce Commission in an administrative claim, or in a private lawsuit in a Texas court. The claim deadline to open an administrative Payday Act claim with the Texas Workforce Commission is 180 days after the date the wages became due. The deadline, or statute of limitations, for filing a lawsuit under the Payday Act in a Texas court is two years after the date the wages became due.
In Igal, the claimant did not file the Payday Act claim with the TWC within the 180-day deadline. The Texas Supreme Court's decision in Igal stops a claimant that filed a claim administratively with the TWC that was too late (e.g. after the 180 deadline) to later file a civil lawsuit in a Texas court, even when it is filed within the two year statute of limitations.
In Igal, the Texas Workforce Commission concluded that Igal’s claim failed on the merits and that the Texas Workforce Commission did not have the ability to rule on the merits because Igal filed the claim too late. Instead of trying to get a rehearing or judicial review of the Texas Workforce Commission's opinion, Igal filed suit against his previous employer in Texas state court for the unpaid wages.
The Texas Supreme Court first determined that the TWC had power to determine the wage claim (even though the Texas Workforce Commission itself determined it did not). The court then looked at whether res judicata should bar Igal’s claim. Res judicata prevents the re-litigation of claims that have been finally decided in a prior lawsuit. The Texas Supreme Court determined that res judicata stopped Igal’s claim because the necessary elements were in place: the Texas Workforce Commission acted in a judicial capacity when deciding the wage claim and the parties had an opportunity to make their claims through an adversarial process in which the TWC decided contested issues of fact.
The decision of Igal has made a serious impact on Texans seeking payment of unpaid wages. In order to get unpaid wages under the Texas Payday Act, employees must be careful not to take actions that could forever bar future recovery of the wages.
Contact Austin Employment Lawyers Dominic Audino and Andrew Traub for a free consultation on the Texas Payday Act or employment discrimination in the workplace.
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